Carter v. Dept. of Veterans Affairs

• Decision Date: 08 June 2006
• Docket Number: No. S127921.,S127921.
• Citation: 38 Cal.4th 914,44 Cal.Rptr.3d 223,135 P.3d 637
• Court: California Supreme Court
• Parties: Helga CARTER, Plaintiff and Respondent, v. CALIFORNIA DEPARTMENT OF VETERANS AFFAIRS, Defendant and Appellant.

44 Cal.Rptr.3d 223

38 Cal.4th 914

135 P.3d 637

Helga CARTER, Plaintiff and Respondent, v. CALIFORNIA DEPARTMENT OF VETERANS AFFAIRS, Defendant and Appellant.

No. S127921.

Supreme Court of California.

June 8, 2006.

Joseph Maguire, John H. McCardle, Sacramento, Patricia M. Keegan and Robert Wilson for Defendant and Appellant.

Graves & King, Patrick L. Graves, Riverside, Harvey W. Wimer III and Dennis J. Mahoney for Diversified Paratransit, Inc., and California Manufacturers and Technology Association as Amici Curiae on behalf of Defendant and Appellant.

Jones Day, Elwood Lui, Scott D. Bertzyk and Eugenia Castruccio Salamon, Los Angeles, for Los Angeles Unified School District as Amicus Curiae on behalf of Defendant and Appellant.

Terry K. Davis, Santa Ana, for Plaintiff and Respondent.

Law Office of David J. Duchow and David J. Duchow for California Employment Lawyers Association as Amicus Curiae on behalf of Plaintiff and Respondent.

Orren & Orren and Tyna Thall Orren, Pasadena, for Janis Adams as Amicus Curiae on behalf of Plaintiff and Respondent.

Dave Jones and Joseph Dunn as Amici Curiae on behalf of Plaintiff and Respondent.

CHIN, J.

[135 P.3d 918]

In 2003, the Legislature amended the Fair Employment and Housing Act (Gov. Code, § 12900 et seq. (FEHA))¹ to state that employers are potentially liable when third party nonemployees (e.g., the employer's customers or clients) sexually harass their employees. (Stats.2003, ch. 671, § 2, amending § 12940, subd. (j)(1).) Prior to the amendment, section 12940, subdivision (j)(1), seemed to apply to employers and employees only. In amending the statute to expressly refer to harassment by nonemployees, the Legislature stated its intent "to construe and clarify the meaning and effect of existing law." (Stats.2003, ch. 671, § 2.) The question we address is whether the 2003 amendment may be properly applied to the present action, which was initially before this court when the Legislature amended the statute. We conclude the amendment merely clarified existing law and therefore does apply to this case. We therefore reverse the Court of Appeal's judgment on remand to the contrary.

I. FACTS AND PROCEDURAL HISTORY

We summarize the relevant facts and procedural history as presented by the Court of Appeal and the record below.

Plaintiff Carter worked as a nurse at defendant California Department of Veterans Affairs (VA). Residents were usually veterans over age 62 or suffering from a disability that prevented them from earning an independent living. In 1996, plaintiff provided nursing care for a tenant resident, Elber Scott Brown, who was recovering from penile implant surgery. Plaintiff befriended Brown, took quilting lessons from him, and invited him to spend Thanksgiving with her family as part of the VA's "Adopt a Resident for the

[135 P.3d 919]

Holidays" program. Initially, Brown made suggestive remarks to plaintiff including, "You've really got nice breasts" and "You've got a great ass." Plaintiff regarded these remarks as inappropriate but harmless. She hoped that after Brown visited her home he would realize she had a husband and family and that he would stop the conduct.

Brown's behavior toward plaintiff worsened sometime after the holidays. Brown told plaintiff that he wanted to sleep with her and threatened to ruin her reputation by telling others that he had slept with her. Plaintiff repeatedly refused Brown's overtures, and later overheard him telling people in the clinic that he had sexual encounters with her at a local Motel 6. Plaintiff asked Brown to stop making the false accusations, and complained about Brown's behavior to her supervisor. But Brown continued to harass her.

The VA administrator, Thomas Langley, acknowledged that VA residents were subject to a code of conduct that prohibited them from engaging in sexual harassment. Among other sanctions, the VA could evict residents for misconduct. After plaintiff complained to her supervisor about Brown's behavior, he advised plaintiff to have no contact with Brown. The supervisor also provided counseling for Brown and issued plaintiff a walkie-talkie that she could use to call security if Brown's harassing behavior continued, which it did. Brown even tried to ram plaintiff with his electric scooter in the VA facility. After the VA failed to take effective steps to end the harassment, plaintiff went on administrative stress leave. She took prescribed antidepressants and sleeping medication to relieve her stress during this time. After her second leave, she did not return to work because "nothing had changed" and she was afraid to return.

While plaintiff was on leave, she filed a complaint with the Department of Fair Employment and Housing (DFEH). The DFEH issued plaintiff a right-to-sue letter. Plaintiff did not act after her superiors told her that a state employee could not sue a state agency. Plaintiff's superiors also told her that if she filed a complaint she would be fired. Plaintiff later discovered that she could file a complaint against the state, and sued for sexual harassment. The trial court entered judgment in plaintiff's favor and the VA appealed.

The Court of Appeal reversed the judgment after concluding that the FEHA did not impose liability on an employer when its customers or clients sexually harass its employees. We granted plaintiff's petition for review, and held the matter for a case pending before us that addressed the same issue: Salazar v. Diversified Paratransit, Inc. (Cal.App.) review granted January 22, 2003, S111876 (Salazar I). In Salazar I, a bus passenger sexually harassed the female bus driver, and the appellate court held that the FEHA did not impose liability on the employer for the passenger's conduct. In response to

[135 P.3d 920]

the Court of Appeal decision in Salazar I, the Legislature introduced Assembly Bill No. 76 (2003-2004 Reg. Sess.). The bill amended the FEHA to add language specifying that employers are "responsible for the acts of nonemployees, with respect to the sexual harassment of employees . . . where the employer . . . knows or should have known of the conduct and fails to take immediate and appropriate corrective action." (§ 12940, subd. (j)(1), as amended by Stats.2003, ch. 671, § 1.) The bill's stated intent was "to construe and clarify the meaning and effect of existing law" and to reject Salazar I' s interpretation of the FEHA. (Stats.2003, ch. 671, § 2.)

We dismissed the review of both the present case and Salazar I and remanded them to the Courts of Appeal for reconsideration in light of the amendment to section 12940, subd. (j)(1). The Court of Appeal reconsidering Salazar I found the 2003 amendment to section 12940, subd. (j)(1) to be a clarification of existing law and remanded the action to the trial court for further proceedings. (Salazar v. Diversified Paratransit, Inc. (2004) 117 Cal. App.4th 318, 11 Cal.Rptr.3d 630 (Salazar II).)² As noted, in the present action the Court of Appeal disagreed with Salazar II, concluding that the amendment was neither expressly retroactive nor, despite the Legislature's declaration to the contrary, merely declaratory of existing law. The court further concluded that, although the Legislature expressed its intent to apply the amendment retroactively, it would be a violation of due process to do so.³ We granted plaintiff's petition for review in order to resolve the conflict with Salazar II.

II. DISCUSSION

A. Background

As amended in 1984, the predecessor to section 12940, former subdivision (j)(1), made it unlawful "[f]or an employer, labor organization, employment agency, apprenticeship training program or any training program leading to employment, or any other person, because of race, religious creed, color, national origin, ancestry, physical handicap, medical condition, marital status, sex, or age, to harass an employee or an applicant. Harassment of an employee or an applicant by an employee other than an agent or supervisor shall be unlawful if the entity, or its agents or supervisors, knows or should have known of this conduct and fails to take immediate and appropriate

[135 P.3d 921]

correction action. An entity shall take all reasonable steps to prevent harassment from occurring. Loss of tangible job benefits shall not be necessary in order to establish harassment." (§ 12940, former subd. (i), as amended by Stats.1984, ch. 1754, § 2, pp. 6405-6406, italics added.)

As amended in 1984, the uncodified preamble in section 1 of the statute expressly stated that "[i]t is the existing policy of the State of California, as declared by the Legislature, that procedures be established by which allegations of prohibited harassment and discrimination may be filed, timely and efficiently investigated, and fairly adjudicated, and that agencies and employers be required to establish affirmative programs which include prompt and remedial internal procedures and monitoring so that worksites will be maintained free from prohibited harassment and discrimination by their agents, administrators, and supervisors as well as by their nonsupervisors and clientele. To further this intent, the Legislature enacts this act." (Stats.1984, ch. 1754, § 1, pp. 6403-6404, italics added; hereafter section 1.)

The Legislature amended section 12940 several times (in 1999 it changed subdivision (i) to subdivision (h)(1), although the language in the statute remained identical to the 1984 version). In 2000, the Legislature redesignated subdivision (h)(1) as (j)(1) (Stats.2000, ch. 1049, § 7), again keeping the language substantially similar. In 2003, the Legislature amended section 12940, subdivision (j)(1), in order to insert the following relevant language between the statute's second and third sentences: "An employer may also be responsible for the acts of nonemployees, with respect to sexual harassment of employees . . . in the workplace, where the employer, or its agents or supervisors, knows or should...